Chillin' out till it needs to be funded
With Merkel shooting down the concept of a Banking union with Joint Deposit insurance and Eurobonds not even making most headlines, the Euro is set for an extended fall as the ECB and the Germans are no where near the new market denominator of required Easing and structural changes. Of course Germany just wants to secure its lent monies and may continue to ask for Cyprus, Spain and any others to cede sovereignity for any cash, Spain continues to bat for a banking union as a ESM sourcing of its bailout funds formally applied,may lead to other sovereign holders to seek definitions of default again which are triggered if conditions for bondholders change so they become secondary to the new ESM bonds.
Spanish banks fell on downgrades yesterday even as bailout funds of EUR 50 -60 B are deemed enough by current audits. New audits happen till September when more clarity emerges on how much is needed when. Estonia and Ireland meanwhile standout as unlikely islands of prosperity having survived austerity measures Greece will not be attending the Summit on Thursday and Friday. Even with a 7% 10-year yield falling to 6.3%, Spain’s rating of Baa3, still investment grade, is ahead of most BRIC ratings including India and Brazil at Ba1 carrying forward application of uneven rating strategies across two decades of geo-political changes which are not being reflected.
Meanwhile the Arizona immigration law was still cleared in some measures but powers to accost immigrants on suspicion were quashed 5-3, and a 6-2 verdict struck down provisions making it a crime to not carry federal registration papers. Yet police can check immigration status when stopping anyone for traffic offenses and others and inform the Federal authorities that the immigrant was an “llegal” Justices Antonio Scalia and Clarence Thomas wrote dissent opinions asking SB1070 be upheld in its entirety
Opinion on the Healthcare law was withheld on Monday
Oil is trading below $80 (WTI) waiting for China and Europe to recover and shore up demand from the US and globally